The complexity and multifactorial nature of Alzheimer's disease (AD) pose unique challenges for the development of effective therapies. Efforts to target specific AD-related pathways have shown promise in animal studies, only to fail during human trials. There is a pressing need to identify novel therapeutic targets for AD. Apolipoprotein (apo) E4 increases the risk and lowers the age of onset for developing AD in a gene dose- dependent manner. In most clinical studies, apoE4 carriers account for 65-80% of all AD cases, highlighting the importance of apoE4 in AD pathogenesis. Emerging evidence from animal and clinical studies suggest that targeting some of the apoE4's detrimental effects for therapeutic intervention could be useful for treating AD. However, for many of these targets, a systemic validation is needed before further development. Mounting evidence from our lab suggests that hippocampal GABAergic neurotransmission is one such promising target for intervention in the setting of apoE4-positive AD. First, we found that expression of apoE4 in knock-in (KI) mice causes age-dependent impairment of GABAergic interneurons in the hilus of the hippocampus, which correlates with the extent of learning and memory deficits. Second, optogenetic inhibition of hilar GABAergic interneuron activity impairs spatial learning and memory in mice, indicating that hilar GABAergic interneuron impairment can directly cause cognitive deficits. Third, the GABAA receptor potentiator pentobarbital rescues the learning and memory deficits in apoE4-KI mice. Fourth, apoE4 impairs GABAergic interneurons in human iPSC-derived neuronal cultures and in the hippocampal hilus in AD patients. Fifth, hilar transplantation of mouse medial ganglionic eminence (MGE)-derived GABAergic interneuron progenitors restores normal learning and memory in apoE4-KI mice without or with A accumulation. These results strongly implicate apoE4 in hilar GABAergic interneuron impairment, leading to learning and memory deficits, which could be a therapeutic target for AD. There are different subtypes of GABAergic interneurons in the hippocampal hilus, including those positive for somatostatin, parvalbumin, or neuropeptide Y. Using transgenic Cre driver lines, we will selectively express light-sensitive optogenetic proteins, including channelrhodopsin-2, halorhodopsin, and ArchaerhodopsinT, in these cells to control their activity and thus determine their contributions to normal learning and memory and to apoE4-induced learning and memory deficits in mice. Specifically, we propose to validate the application of optogenetic tools for the manipulation of different hilar GABAergic interneuron subtypes ex vivo and in vivo (Aim 1); to determine the contribution of different subtypes of hilar GABAergic interneurons to apoE4-induced learning and memory deficits using optogenetic tools (Aim 2); and to determine the underlying mechanisms by which hilar transplantation of mouse MGE-derived GABAergic interneuron progenitors restores normal learning and memory in aged apoE4-KI mice using optogenetic tools (Aim 3).